Patent Reform & Legislation

April 2, 2016

SBTC Supports the STRONGER Patents Act of 2017

In June of this year, the STRONGER Patents Act of 2017 (S.1390) was introduced in Congress by co-sponsors Senator Chris Coons (D-DE), Senator Tom Cotton (R-AR), Senator Dick Durbin (D-IL) and Senator Mazie Hirono (D-HI). This bill would strengthen our nation’s patent system, while making it easier and less costly for small businesses to defend and protect their intellectual property in court. SBTC stands with our parent organization NSBA in supporting passage of this legislation, and we ask our members to communicate their support for it to their members of Congress.

SBTC Acknowledged for SCOTUS Amicus Brief by Law360

SBTC’s Amicus Brief requesting that the US Supreme Court take the case of Commil v. Cisco Systems was discussed by the website law360.com. The case is about the fact that patent holders have lost their constitutionally guaranteed right to a jury trial. The article states in part:

Expressing concern that patent owners’ right to a jury trial was being eroded, a small-business group [SBTC] and a consulting firm urged the U.S. Supreme Court to hear Commil USA LLC’s appeal of a Federal Circuit ruling that vacated a $74 million verdict against Cisco Systems Inc…

“The Seventh Amendment right to trial by jury is of immense importance to patent owners and the enforcement of their patents,” an attorney for SBTC and Affinity Labs, Patrick M. Arenz of Robins Kaplan LLP, told Law360 on Wednesday.

To read the entire article, please click on the link below. It can only be viewed by subscribers or readers who sign up for a free trial subscription:

An essential part of a strong patent system is the ability of patent holders to efficiently and reliably enforce their patents against infringers. This is particularly true when a small company or individual inventor with limited resources attempts to hold accountable a larger infringer with unlimited resources. Amici have experienced and seen the important role juries play in resolving patent infringement disputes. As a result, amici are well suited to explain the importance of this Court’s consideration of the issues set forth in the petition, and why further review is warranted.The heart of the petition pertains to the sacrosanctity of the right to trial by jury in patent cases. Commil has tried its patent infringement claims against Cisco to a jury—twice. On both occasions, the jury determined that Cisco infringed Commil’s valid claims. And yet the Petitioner is seeking review by this Court because the Federal Circuit reversed the jury’s factual findings regarding infringement. Amici support Commil’s petition, and request further review for the reasons below.

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Although not expressed in the brief, the reason this is important to small SBTC companies is that the erosion of the right to trial by jury in patent cases is degrading the our ability to grow businesses, create jobs, and grow the American economy.

The Court also rejected the clear and convincing evidence standard of proof of willfulness, replacing it with the preponderance of evidence standard. Further, the Court adopted the abuse of discretion standard of review, rejecting the appellate standard of review.

Justice Breyer authored a concurrence in which he emphasized the need for due diligence in the form of a clearance opinion. Further, the concurrence expressed concern that the Court’s opinion should not be taken by district courts to mean willful misconduct can be established by knowledge of the patent and nothing more.

This case will make it easier for patent holders to get enhanced damages from infringers, thus taking a small step to enforce patents and subdue infringement. While we have a long way to go, this is significant as it is one of the first cases to stop the tide of weakening patents and start helping inventors and small businesses.

We also encourage everyone to engage their Congressmen and women through calls, emails, and social media to oppose HR 9 from being brought back to the floor. Below are a sample email and phone script you can use to help you write or call your Congressional representatives. Also below is a “Twitter Kit” with a list of sample tweets, hashtags, handles, and links you can use. Feel free to use or edit these as you see fit.

Finally, here is a 1-page document you can distribute to any legislators or staffers you interact with. It concisely lays out 9 bullet points for why the “Innovation Act” will harm small business and American Innovation:

The SBTC and the NSBA believe that HR 9, along with its sister bill in the Senate S 1137, could have very damaging effects on the patent system and could undermine the ability of small business inventors to protect and defend their intellectual property. Instead, SBTC endorses HR 2045, the “TROL Act”, and S 632, the “STRONG Patents Act”, which do a much more effective job at stopping abuse of patent demand letters, but without weakening the essential protections in the patent system that allow legitimate small business inventors to defend and protect their intellectual property.

July 2016

Small Inventors Amicus Brief on Halo/Stryker Supreme Court Case
SBTC Contributed to an Amicus Brief for a Supreme Court Case regarding enhanced damages under 35 U.S.C. §284. The Court rejected the clear and convincing evidence standard of proof of willfulness, replacing it with the preponderance of evidence standard.

June 2016

MCM vs HP Amicus Brief
SBTC Chair Bob Schmidt submitted an amicus brief on May 30th for the case of MCM Porfolio, LLC vs Hewlett-Packard, signed by SBTC and 15 different organizations. At issue is whether inter partes review (IPR) violates Article III of the Constitution; and whether IPR violates the Seventh Amendment to the Constitution. Bob Schmidt and the SBTC’s position is that we agree with MCM that the IPR procedure was beyond Congress’s power to impose, and its underpinning rationale—that patents are a matter of administrative largesse, rather than a constitutionally protected property right—is constitutionally infirm.

March 2016

SBTC Amicus Brief on Trading Technologies International, Inc. CBM Case
SBTC files an Amicus brief on behalf of Trading Technologies International, arguing that the Patent Trial and Appeal Board is inapproriately applying Covered Business Method patent definition to a technology patented by Trading Technologies. In the case at hand, Trading Technologies International, Inc. is seeking relief from a Patent Trial and Appeal Board review on a piece of software it created and patented because it doesn’t solve a “technical problem”. SBTC’s position is this review stretches the definition of CBM beyond what it was intended to cover, and that the relief should be granted.

Top 9 Reasons to vote “NO” on HR 9
This one-pager, put together by the Innovation Alliance, highlights 9 different ways HR 9, the “Innovation Act”, could hurt the patent system, small businesses, and America’s economy

SBTC Opposes HR 9, the Innovation Act
We sent this letter to Representative Goodlatte, Chairman of the House Judiciary Committee, outlining our opposition to HR 9 and the manager’s amendment that was under consideration. Unfortunately, the bill was ultimately passed by the committee, and will now face a vote on the House Floor.

In April of 2014, the intellectual property blog IP Watchdog published a series of 5 articles written by SBTC Co-Chairs Bob Schmidt, Heidi Jacobus, and SBTC Executive Director Jere Glover. These articles covered a comprehensive range of topics on patent reform, laying out the reasons why the proposed legislation will harm small business

SBTC’s parent organization, the NSBA, has also been active in the patent reform effort, and they share our views on the issues. The following are a series of letters sent to Senate and House leadership asking for support of S 632 and HR 2045, while opposing S 1137 and HR 9.

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The Small Business Technology Council is a non-partisan, non-profit industry association of companies dedicated to promoting the creation and growth of research-intensive, technology-based U.S. small business.